Fighting Swordsmanship: New Tea Drinks Seek New Tactics
Top brands gain share, small and medium-sized brands survive, and the pattern of new tea drinks is clear
Entering the "second half" of the competition, the new tea brand plans for the future, no longer satisfied with simple store expansion, but also focuses on investment.
Since July 2021, HEYTEA has successively invested in coffee brand Seesaw, oat milk brand Wild Plants, cocktail brand WAT, and also invested in new tea brands such as Wang Ning Lemon Tea, Heji Tao Tao, Ye Cui Shan, etc. HEYTEA Cosmos".
Tea Yanyuese and Mixue Bingcheng also have their own investment layouts.
At the same time, despite the crowded market, there are still new brands entering the new tea drinking track.
They either focus on a certain brand, such as the lemon tea start-up brand Ningji; or take the "yogurt +" differentiation route, such as a yogurt cow; or innovate in the operation model, such as Chunfeng... Through enough differences to obtain capital attention and development opportunities.
Pan Pan, managing partner of Tiantu Investment, believes that the current pattern of the new tea beverage industry is basically set, and the leading companies are still iterating rapidly. The future industry competition will be the competition of supply chain, innovation and efficiency.
Layout investment
Marvel Studios has created the "Marvel Universe" for the audience, and HEYTEA is also building its own "investment empire".
HEYTEA, an incarnation of an investor, made its first equity investment in July 2021, and the investment target was the chain coffee brand Seesaw.
Seesaw, founded in 2012, sells specialty coffee and a one-storey design.
At a time when the coffee market is getting hotter and hotter, HEYTEA is catching up with an "early set".
Subsequently, HEYTEA invested 900,000 yuan to acquire a 15% stake in the oat milk brand wild plant YePlant, and invested in the pre-mixed wine brand WAT cocktail in October 2021.
In the new tea industry, HEYTEA's investment is not soft.
In August 2021, HEYTEA acquired a 70% stake in Wang Ning Lemon Tea in the name of "Xixiao Tea".
In October, HEYTEA invested in the tea brand and Ji Tao Tao, and in November, it invested in the juice brand Ye Cui Shan, holding 60% of the shares.
The tea color is pleasant, and the Mixue Bingcheng is not lonely.
On July 31, 2021, Lu Liang, the co-founder of Chayan Yuese, announced through a circle of friends that he had invested in "Guo Ya Ya", which is also a local online red tea brand in Changsha.
On October 13, 2021, Snow King Investment Co., Ltd., a subsidiary of Michelle Bingcheng, invested in Guangdong Huicha Catering Management Co., Ltd., which owns a new tea brand "Huicha", which focuses on the pearl milk tea business.
In contrast, the head brand Nai Xue’s tea investment is slightly behind.
On March 28, 2022, Nai Xue's Tea Investment established Shenzhen Beautiful Self-Power Investment Co., Ltd. with a registered capital of 10 million yuan, mainly engaged in venture capital and other businesses.
There is no news about Nai Xue's tea's foreign investment, but in order to attract price-sensitive people such as students and young office workers, it launched a sub-brand "Taigai" with a lower unit price as early as 2015.
In recent years, Tiantu Capital has successively invested in new tea brands such as Nai Xue’s Tea and Tea Yanyuese.
Pan Pan, its investment management partner, believed in an interview with a reporter from the Beijing News that at present, the foreign investment of these new tea brands is more of an operational synergy, "but this will not be the norm, it is brand development. Something that will only be considered at a certain stage.”
In addition to investment layout, top brands are also trying to use price adjustment strategies to retain or gain market share.
In February of this year, HEYTEA announced the completion of a comprehensive product price adjustment, and will no longer launch new beverages that cost more than 29 yuan during the year.
In March, Nai Xue lowered the prices of many tea products, bid farewell to the era of "3 prefixes".
The behavior of the two top brands is seen as a "dimension reduction attack" on the waist brand.
Although the price reduction seems "unreasonable" against the background of rising raw materials, Wang Meng, a practitioner in the tea beverage industry, believes that Heytea and Naixue's tea did not "suffer", but instead reduced the cost by reducing product ingredients and specifications. , improve the gross profit margin, and gain the goodwill of consumers.
On the HEYTEA GO applet, the price of HEYTEA classic succulent grapes is 28 yuan, and the newly launched cheese-free pure succulent grapes are priced at 19 yuan.
At first glance, the price of the latter dropped by 9 yuan after removing the cheese. After careful comparison, it can be found that the size of the classic succulent product is a 650ml large cup, while the pure succulent grape without cheese uses a 500ml standard cup.
Also in Nai Xue's refreshment order applet, a cup of classic domineering cheese grapes is priced at 29 yuan, and the newly launched easy grapes are priced at 19 yuan. The former is 650ml and the latter is 500ml.
Pan Pan believes that the main purpose of the tea price reduction of HEYTEA and Naixue is to use price adjustment to increase consumers' repurchase, and then develop brand buying habits, which is more important than better gross profit margin.
"Price reduction is essentially the layout of products with multiple price segments. Mid-end and high-end products will appear in the tea purchase structure of HEYTEA and Nai Xue, which is a business strategy."
According to Wang Qinglin, an investor in the consumption field, whether it is price adjustment or acquisition of other brands, the purpose of leading companies is to harvest more market share and set obstacles for others in areas where they are not good at.
"For example, if my brand is in the 10-yuan price band, I usually don't make 20-yuan products. But I think the 20-yuan price has an opponent that makes me feel threatened, so I will invest in the 20-yuan price band. Second, the third one goes to compete with him. The brand that he received doesn't even need to make money, as long as it makes the other party uncomfortable. Similarly, I make fruit tea, and there is a lemon tea brand that is very popular, but I don't want to make lemon tea, I can invest in a brand to lay out the lemon tea field, so that the top brands in this field can be dizzying, so that I can take the opportunity to develop, this is the strategy." Wang Qinglin said.
The sword goes sideways
At a time when the growth rate of the industry is slowing down and the top brands are gaining share, there are still news of new brand financing, and new entrants generally gain growth through differentiated competition.
In March 2021, the new tea brand Chunfeng received tens of millions of yuan from Nanjing Xingnahe Capital, and opened nearly 70 stores in a city in the model of "one flagship store + N boutique stores of 30 square meters".
In the same year, Xi'an's new tea brand "Chahuanong" and Yunnan's new tea brand "Bawang Teaji" expanded their stores.
At present, "Bawang Tea Girl" has been deployed in Guangxi, Guizhou, Shanghai, Fujian, Sichuan and other provinces, and has opened stores in Malaysia, Thailand, Singapore and other countries.
Tan Li, who once introduced the Taiwanese milk tea brand "Lujiaoxiang" into Guangzhou and Shenzhen, founded the lemon tea brand "Ningji" as a co-founder in February 2021, and obtained tens of millions of capital from ByteDance and Shunwei three months later. Yuan investment, and will complete hundreds of millions of financing in January 2022.
As a start-up brand, Ningji puts more emphasis on digital operations, and its style of play is also close to young people.
At the beginning of 2022, Ningji and iQIYI co-branded, sweeping the platform with "Fantastic Art, Ningji Universe", creating a case of cross-border cooperation between video platforms and tea brands.
In supply chain building, Ningji also has its own ideas.
In 2021, the fragrance lemon tea drink is booming, and various brands have made arrangements, which in turn has pushed up the price of raw materials.
Tan Li realized that the planting of perfumed lemons must be scaled up. With the help of capital, Ningjie directly deployed the upstream supply chain. At present, 6,000 mu of perfumed lemons have been planted in Guangxi.
Tan Li believes that with consumers' increased awareness of health and food safety, low calorie and health will drive the continued growth of the new tea industry in the future.
"This trend has spawned new demand for tea, namely refreshing taste, healthy products, high-quality raw materials, and combination of marketing creativity. Lemon tea fits this trend."
Also on the subdivision track, there is a freshly made yogurt tea brand "One Yogurt Cow".
In 2015, with the idea of "yogurt dessert", Hu Yan and his companions co-founded "One Yogurt Cow", with 20-30-year-old female white-collar workers as the main users, focusing on "yogurt +" differentiated tea products, the brand was established only Expanded to 200 stores a year.
Hu Yan admitted that there were not many yogurt brands when she started her business. She saw the healthy attributes and growth potential of this sub-category.
"We focused on the combination of cereals and yogurt at the time, and the Zimilu product became a hit as soon as it was launched. We did not conduct market education, but consumers spread it spontaneously. This is also the dividend brought by the healthy attributes of yogurt base to the brand."
In January 2021, New Hope Dairy, an A-share listed company, announced that it would acquire a 60% stake in a yogurt cow for 231 million yuan, and the current yogurt drink track attracted attention.
Hu Yan said that New Hope Dairy has brought a lot of changes to a yogurt cow after taking ownership, and it has empowered it in terms of supply chain management, operation model adjustment, and organizational structure adjustment.
Wang Qinglin believes that new brands have their own value, and being able to gain capital attention shows that they have uniqueness, but investment depends on long-term interests.
"Now that capital is invested in new tea drinks, if the track is correct, this will determine what kind of brand the company will grow into. The second is team ability, which determines the height of the company and requires the founding team to walk solidly."
"In this huge and mature market, there are opportunities for brands in every price band." Pan Pan believes that in the unified large market, there will be at least three or four big brands occupying first-line positions, and small brands can also survive.
"Just like the coffee industry, in addition to Starbucks, there are many potential brands that are developing. If a brand can achieve enough differentiation, it can gain opportunities."
The pattern has been set
From the perspective of investors, Wang Qinglin believes that the current pattern of the new tea beverage industry has been determined. In terms of sales, the top five brands occupy nearly half of the market share, leaving little opportunities for small brands.
Wang Qinglin's judgment is mainly based on two points. First, the innovation space of small brands is exhausted.
He believes that in recent years, HEYTEA has been overtaken by Nai Xue's tea, largely because Nai Xue's tea has seized the opportunity of niche fruits such as tangerine.
The output of this kind of niche fruit is limited, and there is a gap between small brands and leading brands in terms of store volume, supply chain, R&D capability, upstream capability, etc., which means that they are "unqualified" to participate in the competition of innovative categories, and innovation will gradually Become a game between giants.
Second, the financial strength of small brands is limited.
"How far is the battle in the new tea market now? When others imitate your products, you have to make the franchisee's price lower than the competition to be competitive. At this time, you need to give the franchisee a certain subsidy. Small players How to make up for lack of financial strength? Even in the same city, big brands will make the original profitable stores of competing products lose money by sticking to the strategy of opening stores. Although the big brands also lose money, there are stores in other areas that are profitable. The purpose is to Eat each other. Even in the bidding ranking of food delivery platforms, it is difficult for small brands that are short of money to gain traffic support.”
The survey data seems to confirm Wang Qinglin's point of view.
According to Tianyancha data, as of September 2021, there were more than 378,000 domestic companies operating in “tea beverages, milk tea, and food and beverages”.
And 3 years has become the "threshold" for survival. Nearly 60% of the tea companies will not survive for 3 years. The proportion of tea companies surviving within 1 year is 24.4%, and the proportion of tea companies surviving for 1-3 years is 35%. %.
Similar to Wang Qinglin's point of view, Pan Pan also believes that the current pattern of the new tea beverage industry has basically been determined. "The head companies are still iterating rapidly, and this iteration is a kind of pressure for new companies. The future competition in the tea beverage industry is the supply chain and innovation. and efficiency competition. Only with stronger supply chain efficiency can product stability, innovation and cost-effectiveness be achieved.”
China Chain Store & Franchise Association's "2021 New Tea Research Report" shows that the new tea supply chain will determine how far the brand goes.
At present, the supply chain capabilities of various brands are quite different, and the level of supply chain management is a decisive factor for brand expansion, innovation capabilities and profit margins.
From the perspective of cost ratio, the cost of fruit accounts for 30%-40%.
Supply is challenging due to the wide variety of fruits, relatively low standardization, strong seasonality and high price volatility.
Wang Qinglin judged that there may not be more than 10 new tea brands with more than 5,000 stores in the future, so it is difficult to run out a new brand with a scale of tens of thousands.
"In the future, capital will pay attention to two types of enterprises, one is the head brand, such as Hey Tea, Nai Xue's tea, Mi Xue Bingcheng, Tea Yanyue Se, Gu Ming, Tea Bai Dao, Shu Yi Burning Immortal Grass, etc. Exclude several listed companies from these brands. The other category is the brand that focuses on subdivided tracks, and uses the particularity of products as a market supplement."
In terms of the capital market, following the listing of Nai Xue’s tea in June 2021, Michelle Bingcheng also reported listing news in the same year, and has completed the listing guidance filing at the Henan Securities Regulatory Bureau.
With the help of capital, Michelle Bingcheng has launched a frantic expansion model in the past two years. In 2020, the number of stores will exceed 10,000, and in 2021, the number of stores will reach 20,000. In terms of store scale, it has become one of the top brands of new tea drinks.
This makes other tea brands that follow the franchise model see greater hope.
(At the request of the interviewee, Wang Qinglin is a pseudonym)
B06-B07 editions were written by reporter Wang Ziyang of the Beijing News